Indices Test Support and Snapback Late in Mixed Session
By Harry Boxer, The Technical Trader (
www.thetechtrader.com)
The indices had a mixed session at the end, but it started out a lot differently. They opened lower, bounced sharply, failed at resistance, and went steadily lower until mid-day when they severely tested key short-term support on the NDX & SPX, actually taking them out slightly, but there was no downside follow-through. They then backed and filled and attempted a bounce mid-afternoon that eventually retested successfully. When that occurred, the indices started to firm and over the last hour or so and jumped back into the plus column on the S&P 500 and OEX, but were unable to do so on the Dow and Nasdaq.
Net on the day, the Dow was down 28 3/4, the S&P 500 up 1.13, the Nasdaq 100 down 7 1/4, and the Philadelphia Semiconductor Index (SOXX) down 5.70.
So it was a mixed session, although the technicals were to the downside today. Advance-declines were 17 to 13 negative on New York and about 9 to 5 negative on Nasdaq. Up/down volume was just slightly lower on New York with a little less than 1 1/2 billion traded. Nasdaq had about a 2 to 1 negative ratio on declining volume over advancing volume, on total volume of just under 2 billion.
TheTechTrader.com board was mostly negative today, with some large point-plus losers. Despite the fact that the shippers had a very strong morning, they reversed sharply in the afternoon and came down hard. DryShips (DRYS), for example, dropped 8 points off its high. After being up 4 1/2, it closed down 3 1/2, on nearly 10 million shares.
Also in that group, Excel Maritime (EXM) was down 1.63 and TBS International (TBSI) down 2.14.
The junior solars also had a difficult session, Ascent Solar (ASTI) dropped 79 cents, Emcore (EMKR) down 1.40 on financing news, Energy Conversion Devices (ENER) 1.06, and Solarfun (SOLF) 90 cents, with JA Solar (JASO) also down 1.62. Canadian Solar (CSIQ) off 16 cents (was one of the better performers in that sector),
Vision Sciences (VSCI) got hammered for 81 cents, Nuance Communications (NUAN) lost 42 cents, Eschelon Corp.(ELON) down 55 cents, Cepheid (CPHD) 67 cents, Cree Inc.(CREE) 53 cents, China Natural Resources (CHNR) 97 cents.
On the plus side, there was only one point-plus gainer, and that was Aluminum Corp. of China (ACH), which jumped 2.33 showing strong relative strength. Mercadolibre (MELI) gained 40 cents, Sigma Designs (SIGM) 53 cents, and Pharmasset (VRUS) was up 40 cents.
Stepping back and reviewing the hourly chart patterns, the indices had a very severe test of support today but held the rising trendlines and lateral price support and managed to snap back in the last hour. They did close right at key overhead resistance near 1780 NDX and 1350 S&P. So we'll see if there's any further upside progress that can spill over to Tuesday.
Have a nice three-day weekend!
Harry
